Colonial First Estate expects more than $80m from Hunter Street sale

Carolyn Cummins

COLONIAL FIRST ESTATE is looking to raise upwards of $80 million through the sale of the 9 Hunter Street skyscraper as it looks to wind up its unlisted Direct Property Investment Fund.

The 20-storey property is half-owned by the DPIF and the industry fund Office Super Fund.

The sale has been triggered by the pending closure of the $850 million DPIF within the next year.

As a result, it is expected DPIF will put its 25 per cent stake in Grosvenor Place, as well as assets at 39 Martin Place and at Homebush in Sydney, and 367 Collins Street, Melbourne, on the market in the coming months.

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In its June annual report, the fund's manager, Colonial First State Asset Management, says it wants to sell the portfolio of seven office towers by September next year.

It sold the 1 York Street site to the HNA Group for $117.7 million earlier this year.

In the report it says the continuation of subdued business sentiment, as well as risks surrounding global and domestic economic growth, have kept office demand in check across most CBD markets.

''As a result, there was limited movement in vacancy levels and prime gross effective rents across most CBD office markets,'' the report says.

The 9 Hunter Street asset sits above the busy Hunter Connection with direct access to Wynyard station and is in the process of undergoing floor-by-floor renovations.

There are 18 tenants, including Macquarie Bank Group, which has 34 per cent of the space.

The property is being sold by the managing director of NSW at Knight Frank, Richard Horne, and the managing director for capital transactions Australia at Knight Frank, James Parry. The agents said that the average lease for the 15,623-square-metre building was 4.1 years.